Thank you, Mr. Chairman. They're gone to get copies of the opening remarks for all the Members.

Thank you, Mr. Chairman. I am pleased to appear today to review the proposed 1994-95 Capital Main Estimates for the Department of Public Works and Services. The department has a mandate to design, construct, operate and maintain GNWT assets, and to provide a broad range of services to other departments, boards and agencies so they can deliver their programs and services to the residents of the NWT. The objective is to deliver cost-effective and efficient facilities and services and to ensure that residents and businesses realize maximum benefits from expenditures.

Responsibility for managing construction of capital projects has now been fully decentralized. Ten project management positions were transferred from headquarters to regional and area offices this year.

The government's decentralization initiative has resulted in the construction of several new facilities in the communities of Fort Smith, Hay River, Fort Simpson, Inuvik, Rankin Inlet and Iqaluit. I am pleased to say, Mr. Chairman, that all of the contracts for new offices and housing facilities were with locally-owned development companies.

The new "building and learning strategy" and the business incentive policy are two significant initiatives that enhance the benefits flowing to northern communities from our construction programs.

As Members know, the Minister of Education and I have initiated the development of a strategy that will use our capital projects to train more northerners in the building trades. Construction projects offer tremendous training and employment opportunities for local residents. Under this new strategy, communities will be able to more actively participate in the planning and implementation of these training programs.

The strategy is being implemented in six pilot communities, Gjoa Haven, Pangnirtung, Rankin Inlet, Aklavik, Fort Good Hope and Fort Simpson, in 1993-94. A total of 25 local residents received training this summer. Together with the Minister of Education, Culture and Employment, I will table a final copy of the strategy during this session.

The industry certified construction worker training program was also delivered on seven projects. Over 30 workers were trained in Baker Lake, Cambridge Bay, Lac La Martre, Trout Lake, Cape Dorset, Arctic Bay and Pond Inlet.

Ensuring that the preferences available through the business incentive policy are effectively creating northern benefits and reducing the leakage of dollars to the south continues to be a priority.

The Senior Management Preference Committee, chaired by the department, provides much more effective scrutiny of the policy and companies applying for benefits. This senior management involvement in the administration of the policy has greatly enhanced our understanding of the issues facing northern companies in competing against southern companies for government contracts, and improved our ability to respond to their concerns. In addition, the consolidation of departments has allowed for better coordination between our contracting and purchasing activities, and has resulted in an initiative to boost northern manufacturing.

Five 20,000 gallon fuel storage tanks for Snare Lake are currently being manufactured in Hay River. This will result in the creation of a new manufacturing shop and create approximately ten new jobs. A number of smaller fuel tanks are being manufactured by another company in Yellowknife, which has created four job.

In Hay River, two new furniture manufacturing operations are now supplying much of our office and residential furniture needs.

In a continuing effort to assist the development of local construction companies, a greater emphasis is placed on negotiated contracts. For example, Cabinet approved negotiated contracts with a joint venture made up of the Gwich'in and Inuvialuit for the construction and operation of the Inuvik Visitors' Centre. A contract was also approved for major crushing work in Rankin Inlet and Whale Cove, with a joint venture of local contractors and an experienced northern contractor. The Fort Simpson office complex was negotiated with a new development company owned by residents of Fort Simpson.

The department has also entered into many sole source contracts with hamlets and local companies. For example, a sole source contract was entered into with the Fitz Smith Native Development Corporation for site clearing for the aircraft maintenance hanger in Fort Smith. The department has entered into almost 70 contracts for road site land and dust control work in the Fort Smith, Inuvik and Baffin regions. Almost all these contracts in the road site land and dust control programs are either sole-sourced or tendered by invitation with hamlets, bands or local contractors.

In cooperation with MACA, a number of full authority agreements were established to allow communities to exercise a greater role in the management of projects. For example, the Hamlet of Rae Edzo will manage the Bay Island bridge repairs, the Rae drainage improvement project and the sewage solid waste project. There is also a full authority agreement with the hamlet of Arviat for granular development.

The school and assembly building project in Trout Lake was delivered through the construction management approach. Seventeen local residents have been employed at various times during the project and four of these residents have also received construction worker training.

Local and northern involvement was central to a number of construction projects in Gjoa Haven. As I mentioned earlier, the community was selected as the Kitikmeot pilot community to test and develop the implementation of the new "building and learning strategy."

One of the projects used for training was the renovations to the adult education centre. The construction management approach was also used on this project. Our own staff acted as the general contractor and nine local employees were involved with the project. Four of the trainees on the adult education centre then moved on to work by themselves on the renovations to a house, with one of the trainees acting as the supervisor.

Also in Gjoa Haven, the fire hall contract employed four local residents, and a local firm received a sub-contract, worth approximately $600,000, on the fuel storage facility project. A total of 15 local residents were trained and/or were employed on construction projects in Gjoa Haven this past summer.

The department also has an agreement with the Department of National Defence to construct additional tankage at our fuel storage facilities in Pelly Bay and Broughton Island. The department was allowed to use our GNWT contracting procedures, and the construction contracts were won by northern companies. In addition, a fuel vehicle was purchased for Pangnirtung. In all of these locations, fuel to the Department of National Defence will be through our POL program, which is delivered by local contractors.

This year, we also completed the construction of the new Legislative Assembly building on time for this session.

The village constructed by northern contractors in the Russia Republic of Sakha was officially opened in September. Fifteen northern companies received over $11 million in contracts from this project and provided work for approximately 60 northern residents. Public Works and Services played a critical role in closing that deal.

As you are aware, most of Public Works and Services' activities in the capital program are directed at constructing facilities for other government departments. In 1994-95, the department will manage capital projects valued at about $90 million. For its own programs, the department is requesting $12.8 million.

I will briefly highlight the department's capital projects.

About $2.1 million is required for government buildings and works. The bunker C fuel storage tanks in the central heating plant in Fort Simpson will be dismantled, the site cleaned up and a study on the long-term viability of the plant will be conducted. Mechanical and electrical systems in the brown building and the federal building in Iqaluit will also be upgraded. The amount of $750,000 will be spent to upgrade ventilation systems to new national building code standards in ten schools.

The amount of $450,000 is requested for the energy conservation capital program. This program is aimed at decreasing the consumption of energy in government buildings. In all cases, these costs will be recovered in five years or less through lower operating costs.

A total of $1.6 million is required to address office space needs across government. In response to direction from this committee, this year the GNWT office allocation standards were revised, and an office accommodation strategy has been developed. In addition, a comprehensive inventory of existing office spaces across the Territories was carried out, and used in developing the new accommodation services capital needs in this plan.

The amount of $277,000 has been allocated to address the most immediate and highest priority office consolidation and improvement needs in Yellowknife. As recommended by the standing committee, the department will continue to examine this need and address shortfalls as they are identified.

In the regions, the largest accommodations project is proposed for Fort Smith, where the regional office building was constructed in 1940. This building requires extensive upgrading or replacement. A study of the building is to be completed this year to determine the best way to proceed. The amount of $428,000 has been identified in the plan for potential tenant improvements in a new building which would be leased, or renovations to the existing building.

The restructuring of government initiative necessitates major improvement projects in Iqaluit, Inuvik and Hay River.

The amount of $342,000 is requested to replace vehicles and equipment for various GNWT departments, boards and agencies.

The amount of $1 million is being requested to undertake the dust control program in 39 communities.

The amount of $210,000 is requested to continue the expansion of the mainframe computer systems. These upgrades are necessary to keep up with the demand for these services.

The department is requesting a total of $7.5 million for petroleum products fuel facilities and vehicles. Of this total, $6.9 million will be spent on fuel storage facilities in seven communities in four regions. The construction of the fuel storage facility in Snare Lake will be completed. Construction will continue on the fuel storage facilities in Arviat, Clyde River, Coral Harbour and Gjoa Haven. Work to expand and improve the fuel storage facilities in Igloolik and Lake Harbour will also start.

The amount of $600,000 of the petroleum products capital is required to replace existing fuel delivery trucks for Arviat, Chesterfield Inlet, Fort Good Hope, Repulse Bay and Tuktoyaktuk.

Thank you, Mr. Chairman, that concludes my opening remarks. I will be pleased to respond to questions from the Members.

Thank you, Mr. Chairman. With regard to Public Works and Services, the committee supports the department's initiative over the past year to provide new office and housing facilities to the communities of Fort Smith, Hay River, Fort Simpson, Inuvik, Rankin Inlet and Iqaluit, as a result of the decentralization plan. The committee noted that the department has also decentralized ten project management positions to regional and community offices.

The committee also supports the department's initiative to develop comprehensive office plans for accommodating headquarters personnel in Yellowknife. Through departmental consolidation and termination of various leases, the department projected savings in the order of $1 million over the next five years. Based on these estimated savings, the department obtained supplementary funding of approximately $626,000 to complete office renovation and tenant improvement projects in Yellowknife. Members were disappointed to learn that, as of October, very little of this money has been applied to the purpose intended. In addition, forecast spending on Yellowknife renovations and improvement for the fiscal year 1994-95, have been cut by $800,000.

Mr. Chairman, the committee is of the opinion that this development will adversely affect the efficiency of headquarters personnel. The committee would like the department to revisit plans for headquarters office improvements and report back to the committee.

In addition, committee members believe that, given the current commercial real estate market in Yellowknife, by going to public tender rather than over-holding leases, it is likely that headquarters personnel could be accommodated more cost-effectively.

Therefore, Mr. Chairman, I move that the committee recommends that the Department of Public Works and Services review the Yellowknife office plan and resubmit their estimates for office renovations and tenant improvements for 1994-95.

Question.

Thank you, Mr. Chairman. Progress has been made by the department and its client departments in the use of "standardized building" designs in facilities such as schools, hamlet offices and health centres. The committee supports this approach and encourages further applications in facilities such as group homes, treatment centres, tourist facilities and libraries. This method will result in significant

cost-savings and ensure consistent standards within communities.

Criticisms of architects "over-designing" facilities surfaced during our review, particularly in smaller settlements. Members request that the department seek simpler solutions that, while consistent with design standards, are more practical and easier to maintain in smaller communities.

In the town of Inuvik, buildings are being removed from the high temperature hot water system, operating through the utilidor. Detached houses have already been removed and row housing units are scheduled to come off next year. Recognizing that there are substantial cost-savings in this conversion from the high temperature hot water system to boilers, the committee would like assurance that Public Works and Services, the NWT Power Corporation and the client departments are coordinating their construction plans.

Question.

That concludes the Standing Committee on Finance remarks, Mr. Chairman.

With regard to the department managing the Rankin Inlet mine tailings project for DIAND, are there any other projects that the department is managing on behalf of DIAND or is that the only one?

Thank you, Mr. Chairman. That is the main one right now.

There are others then, but that's the main one. The question was is that the only one?

Thank you, Mr. Chairman. As far as I know, that's the only one.